At a time when inflation is hurting the pockets of consumers, GlaxoSmithKline Consumer Healthcare, maker of Horlicks and Boost, is looking at expanding its presence in rural areas. Zubair Ahmed, MD of the company, talks to Business Line. Edited excerpts.

What is your outlook for the year given the current macro-economic scenario?

Slowdown is really hurting the amount of money the consumers are willing to spend. The size of the wallet is shrinking, particularly for the middle-to-low income segments. Inflation is partially dependent on policies and is not easy to fix. Already, there is some negative outlook for monsoons. Bad monsoons, apart from other things, directly impact inflation and the cost of agro-commodities. So, unless you fix inflation the mindset of the consumer is not going to change. In the long-term, (at least nine months to a year), you will see an upward trend, based on how aggressive the new Government is in terms of announcing and implementing policies.

There has been a slowdown in the rural markets. What will be your strategy?

In spite of the slowdown, the fastest growing regions remain the rural ones. The reason is that there is still a huge headroom to grow, as the consumption rates and category penetration is still very low and the base is very small. For us, rural markets are of tremendous importance. We will continue to focus on coverage expansion, village coverage and adding more relevant products at the right prices.

You also plan to come out with specific products based on rural insights. When will you start rolling these out?

The insight work is more or less complete and will be converted into concepts, which will be researched. Then the prototypes will be developed and tested. It will take about 18 months from insight work to the launch of products. The health drink category was growing at double digits and has slowed down to single digits. How are you battling that challenge?

Our strategy is to ensure that our brands remain top of the mind for consumers. We are telling consumers that they can cut down on other things but not health food drinks; giving them a belief based on hard-core science. We are increasing the science behind our products and keeping our brands on the top of consumer’s minds to get around the slowdown.

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